Tag Archives: Wunder Capital

Following the successful launch of its Term Loan product last spring (here is an in-depth Q&A we did with them at the time), Wunder Capital has announced an expansion to the scope of project types that are eligible for financing. Wunder, a financier in the small to mid-sized commercial solar market, now services loan requests up to $1.5 million (previously capped at $1 million) and offers debt capital to third-party owned systems.

Payment parameters

Wunder’s Term Loans were designed as a 7-year, non-recourse option for commercial building owners looking to maximize returns on their solar investment while managing cash flows. Wunder’s flexible payment plan allows for borrowers to use available rebates and incentives to make early payments with no penalty. These payments trigger an automatic re-amortization of the remaining balance, lowering future payments as well as the overall cost of financing. The most common prepayment is with the ITC benefit, which, if used as an early payment in the first year of the loan, reduces subsequent payments by 30 percent.

“We began to notice that a number of our partners were using their own corporate tax appetite to offer a handful of PPAs per year,” Birsic said. High demand for a limited supply of tax equity investors makes it nearly impossible to find a third party system owner for a one-off small commercial project.

Wunder’s recent product expansion allows for loans to be made directly to the SPV managing the system and to be paid back with revenues from the PPA and other incoming incentives. The non-recourse loans provide some cashflow freedom for developers and EPCs building systems off their balance sheet. Loans can also be used to refinance existing, unlevered systems.

Wunder sources it’s projects through a growing partner network of EPCs and developers across 27 states. The recently announced product enhancements are a direct reflection of partner feedback, says Bryan Birsic, Wunder’s CEO. “We launched a handful of software enhancements this fall which really allowed our financing team to focus more on listening to our partners and improving the product and less on administrative tasks.”

Wunder loans are eligible across the continental US and Wunder deploys all of their financing products through partnerships with EPCs, project developers, and a network of national equipment manufacturers and distributors. Partners are not charged dealer or application fees.

Last month, Boulder, Colo.-based financial technology company Wunder Capital launched its third financing product for commercial solar PV projects, Wunder Term Loans. These new Term Loans are designed for businesses looking for an accelerated path to ownership of their commercial solar project. Wunder focuses on the traditionally underserved small commercial market, providing businesses and EPC/developer partners with development and term financing for projects valued at up to $1 million.

What hurdles are there for financing solar in the small commercial market?

Wunder Capital: How long do you have? The first hurdle doesn’t have anything to do with solar but is simply that the cost of capital for private companies is generally very high. When making a loan to an individual, lenders have long relied on FICO scores and when making loans to large corporations, they have similar rating mechanisms like S&P and Moody’s. This allows them to make fast decisions in an algorithmic way. But credit ratings for private companies, especially smaller ones, are inconsistent and widely varied. This results in commercial lenders being very conservative. They typically have an application process with data requirements that are onerous for the borrower and expensive for the lender to review. Once processed, those lenders will most often look for their loans to be backed by assets with significant proven value (like real estate), or for a borrower to leverage their own home with a personal guarantee.

Unfortunately, solar as an asset class is still new and most lenders do not feel comfortable with it yet. So, even though a commercial customer is investing in an asset that will save their business money and produce valuable electricity for at least 25 years, they cannot use the system as collateral for the loan, as is typical when buying other valuable assets like real estate and equipment. The lender will instead look for an all-assets lien, a lien on the building, or even a personal guarantee from the business owner. Many businesses already have all-assets liens because of general business loans they may have taken out or from inventory suppliers they work with. Those who don’t may want to keep that option open for the future.

There are also a series of other hurdles faced by different segments. The split incentive problem between tenants and owners is often cited; lack of tax appetite is sometimes an issue, especially for non-profits; and for installers looking to move into the space from residential, the sales cycle can be surprisingly long. But from what I’ve seen across more than 20 states, the non-standard credit ratings and unproven solar asset value are the two biggest challenges.

Your new Term Loans are collateralized with the solar project itself. Can you explain a bit more about what this means for the stakeholders involved?

Wunder Capital: Absolutely. So, like I mentioned before, all-assets liens are a common way for commercial loans to be secured. It basically means that the lender gets everything that the business owns if they were to default on their loan. For smaller businesses taking out larger loans, the business itself often doesn’t have enough assets to cover the loan amount, so lenders will require a personal guarantee as well. This is essentially the business owner putting their name on the loan and agreeing that all of their personal assets are also on the line. Additionally, signing a personal guarantee or allowing for an all-assets lien could be limiting your borrowing options in the future.

At Wunder, we feel more comfortable than other lenders with the asset value of solar systems so we issue loans that are backed by the system itself. Because we focus only on solar financing for a specific profile, we are very confident in the recoverable value of each of the solar assets that we are investing in.

What are some specific markets or project sizes that fit the sweet spot for this product?

Wunder Capital: Our loans are eligible in all 50 states and can be used on projects up to 1 MW, though we mostly focus on the sub 500 kW space because these are the most underserved U.S. businesses right now. The big barrier in a lot of regions is the utility rate structure. We look at the project economics very closely to confirm the business is actually going to be realizing financial benefits from their investment within a short timeframe, and so we can determine the value of the collateral we’re lending against.

What does your ideal borrowing business look like?

Wunder Capital: Our Term Loan is a 7-year product, so it’s really designed for businesses that are more focused on the lifetime ROI of the system than on monthly cashflows. People tend to focus more on rate than on loan term, but really, the term has a much bigger effect on how much you end up paying in interest on an amortized loan. Total interest paid over the life of one of our Term Loans is about the same as you would pay on 3 percent capital with a 20-year term. So, we’re looking for businesses that understand these trade-offs and can afford to make slightly higher monthly payments for a shorter amount of time in order to get to virtually free power sooner. Our borrowers are often established businesses with strong financials and savvy leadership that are thinking critically about how to maximize their investment in solar.

Click 2 for more, with questions pertaining to solar+storage and an example of this program in action

Wunder Capital is starting to own the world of solar financing. The Boulder, Colo.-based financial technology company recently launched its third financing product for commercial solar PV projects, Wunder Term Loans. These new Term Loans are designed for businesses looking for an accelerated path to ownership of their commercial solar project. Wunder focuses on the traditionally underserved small commercial market, providing businesses and EPC/developer partners with development and term financing for projects valued at up to $1 million.

Following the model established with Wunder’s first two financing products, Term Loans are diligenced, originated and managed in Wunder’s customer software platform. This eliminates many of the inefficiencies in traditional lending and often results in loan origination in as little as a week.

Term Loans are collateralized with the solar project itself, rather than an all-assets lien or personal guarantee. Terms are up to seven years and APRs are generally around 9 percent. However, the loans have no early payment penalties and borrowers are encouraged to pay down the outstanding principal balance as they monetize tax incentives and other benefits.

A $100K Wunder Term Loan will cost the customer half as much in interest and fees as 20-year PACE financing at 5.5 percent. By focusing on shorter terms and eliminating prepayment penalties, Wunder’s Term Loans will help customers capture more of the benefit of going solar.

“The switch to solar is, for most of our customers, strictly an economic decision. It’s an investment” says Wunder’s CEO Bryan Birsic. “What we’re doing with this product is providing a way for our customers to see a better return on that investment.”

Wunder loans are eligible in all 50 states and Wunder deploys all of their financing products through partnerships with EPCs, project developers, and a network of national equipment manufacturers and distributors.

RENVU Solar Equipment Distribution, a California based equipment distributor, has teamed up with Wunder Capital to offer its customers flexible short-term equipment financing. Based in Boulder, Colo., Wunder Capital is a financial technology company that provides financing to solar projects throughout the country. Wunder allows accredited individuals, trusts, family offices, foundations, hedge funds and pension funds to invest in the country’s new solar infrastructure.

Through Wunder, eligible RENVU customers can secure three to 12 month, interest-only loans in as little as a week. The equipment-backed loans are available for commercial projects with procurement financing needs of up to $250K. Loans have friendly payback terms and extension options in the event of unexpected project delays.

“We are excited to be able to offer our customers another tool to help them build commercial solar projects. And partnering with Wunder, who is experienced with solar project financing, felt like the best way to ensure that our customers get great service and a seamless process” says Erez Dolev, RENVU’s Managing Director.

“It’s been terrific to work with a company like RENVU that places such a strong emphasis on streamlining the process, from application to distribution, and we’re thrilled to formalize the partnership” said Wunder’s Director of Project Development, Katie Lynch. “We expect to unveil platform enhancements this summer that make the process even more seamless for our partners and their customers.”

Wunder Capital and UpSolar America announced a partnership that will bring flexible-term equipment financing to UpSolar’s PV customers.

Wunder Capital is a financial technology company that provides financing to solar projects throughout the country. Based in Boulder, Colo., Wunder allows accredited individuals, trusts, family offices, foundations, hedge funds and pension funds to invest in the country’s new solar infrastructure. Wunder’s software-based approach is dedicated to removing logistical barriers and high costs from solar investing, passing the savings on to investors and borrowers.

With this program, purchasers of UpSolar products will have the option to finance their order with a Wunder Bridge Loan — short term, equipment-backed, interest-only loans. Thanks to a seamless application process, Wunder can provide secured financing for qualified projects in as little as 5 days.

“We are excited to be able to offer our customers with an equipment financing option that is quick and flexible. This offer allows our customers to get more projects done without having to worry about juggling credit limits and balance sheets.” says Stephane Dufrenne, President of Upsolar America.

The equipment-backed loans allow for a more project-specific review lense and are available for commercial projects with procurement financing need of up to $250K. With flexible terms from 3 to 12 months, the loans have friendly payback terms and extension options in the event of unexpected shipping or project delays.

“We are looking forward to helping Upsolar customers get more projects done, faster. Construction and equipment finance has been used on larger projects for years, we are making those same benefits accessible to smaller projects with a more efficient and cost effective process,” said Bryan Birsic, CEO of Wunder.